WASHINGTON, May 12 (AP) -- The Internal Revenue Service was justified in revoking thetax-exempt status of a small New York church that opposed PresidentClinton's 1992 candidacy, a federal appeals court ruled Friday. The unanimous ruling said the revocation -- history's first stripping of achurch's tax exemption for political activity -- "neither violated theConstitution nor exceeded the IRS' statutory authority."Lawyers for the Church at Pierce Creek, in the Binghamton, N.Y., area, hadargued that the tax agency had exceeded its authority, violated the church'sfree-speech rights and engaged in selective prosecution. "These objections are without merit," a three-judge panel of the U.S.Circuit Court of Appeals for the District of Columbia concluded. Federal tax law exempts churches and other charitable organizations fromtaxation provided they do not engage in certain activities, including anypolitical campaign on behalf of or in opposition to any candidate for publicoffice. The Rev. Barry Lynn, executive director of Americans United for Separationof Church and State, said the ruling "slams the door on mixing religion andpartisan politics." "This is a staggering defeat for Pat Robertson, Jerry Falwell and otherswho want to convert America's churches into a partisan political machine,"Lynn said. "In light of this ruling, pastors who allow partisan politickingin the sanctuary are jeopardizing their church's tax exemption." It was the Friday before Election Day in 1992 when the Church at PierceCreek and its pastor, Daniel J. Little, bought a full-page advertisement intwo newspapers urging voters to reject Democratic presidential nominee BillClinton because of his positions on abortion, homosexuality and thedistribution of condoms in public schools. The "Christians Beware" ad appeared in USA Today and The Washington Times.Americans United for Separation of Church and State subsequently filed acomplaint with the federal tax agency. After an investigation, the IRS revoked the church's tax-exempt status in1995, action held in abeyance during the legal fight. A federal judge upheldthe revocation last year, and Friday's decision agreed with his reasoning. The appeals court's decision focused most closely on the church'sfree-speech claims, but rejected them as exaggerated. "The church asserts first, that a revocation would threaten its existence... that a loss of its tax-exempt status will not only make its membersreluctant to contribute the funds essential to its survival but may obligatethe church itself to pay taxes," Judge James Buckley wrote for the panel. "In actual fact, even this burden is overstated ... As the IRS confirmed inoral argument, if the church does not intervene in future politicalcampaigns it may hold itself out as a (tax-exempt) organization and receiveall the benefits of that status," he said. Buckley's opinion also noted that churches can form separate, non-exemptentities "for the promotion of social welfare," and that thoseorganizations can form political action committees to participate incampaigns. The New York church is represented by the Robertson-founded American Centerfor Law and Justice. "While we are disappointed with the ... case involving the Church at PierceCreek, we are encouraged that this court appears to provide a blueprint forchurches to express their beliefs in a political context," ACLJ chiefcounsel Jay Sekulow said. "This is an important development in the area ofprotecting the First Amendment rights." Sekulow said his group had not yet decided whether it will appeal the caseto the Supreme Court. The case is Branch Ministries vs. Rossotti, 99-5097.
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